Greek Tragedy Unfolds in Rhode Island
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  • The Bond Holders are not innocent in this, as they drank the same Kool-Aid as the mortgagees who bought $400K homes on $16,000 salaries.

    The worst of the lot here are the Municipal Bond Dealers, who are only slightly more well-heeled than the mortgage brokers at WAMU.

    Unions, Local Government, and states were all in on this corrupt self-delusion, and every last one of them deserves a massive haircut for their greed.

  • Regardless of what Bond Dealers may “deserve”, if the municipalities of the State of Rhode Island want to be able to continue borrowing money, the bond Owners (many of who are people who’ve bet their retirement on those bonds, because they were supposed to be “low risk”) must get paid.

    BTW, it would be nice if your link to Governing linked to the relvant article, since I can’t find it on their web site.

  • I’ve got a better idea: let’s have a priority for all creditors whose surnames begin with “M.” Would make a lot more sense than favoring a claque of institutional investors who, if anybody does, have the motive, the opportunity and the wherewithal to do he kind of due-diligence that would allow them to price this kind of risk into their loan package in the firt place. Or maybe there is a document in the file saying “and anyway, boss, if ever it ever looks like we are in trouble on this loan, we can just get Rhode Island to change the law.” If there is no such expectation and if we now do allow them to change the law, aren’t we paying them twice.

    And FWIW, I have read the Carlyle half a dozen times and I still haven’t the foggiest notion what exactly he is trying to tell me. But it was ever thus with Carlyle, not so?

  • Wait for the new class of homeless to hit the streets; people left bereft by the death of their pension schemes.

  • Luke Lea

    Great quote!

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